by Andy Marso, KHI News Service
A nursing home chain’s lawsuit against the state of Kansas hinges largely on the state’s failure to implement an electronic system to verify the assets of people applying for Medicaid.
But Kansas is far from the only state to fall short on that score.
“It is a nationwide issue — from Maryland to Alabama to, you know, Texas,” said Chad Bogar, a managing partner at the firm that is handling the lawsuit on behalf of the Evangelical Lutheran Good Samaritan Society. “The one state that I know which is doing a really good job with it has been Florida. Florida has a really good system set up.”
In an effort to curb Medicaid fraud, Congress passed a law in 2008 requiring that every state set up such a system by 2013 and providing federal funds for half of the cost, with states covering the rest.
But barely any states have been able to do it, and some in Congress are voicing frustration about it.
A U.S. Government Accountability Office report from May 2014 found that states were short on the money, staff and time needed to put verification systems in place, and only two of 12 states surveyed had done so.
Leaders of the U.S. House Energy and Commerce Committee and U.S. Senate Finance Committee sent a letter in December 2015 to a top administrator at the Centers for Medicare and Medicaid Services asking why CMS was not enforcing the law.
The administrator, Andy Slavitt, wrote back in February that his agency was “working with states to move toward full implementation” but identified “a number of barriers,” including a lack of companies that states could contract with to build the software.
In his response, Slavitt said that 31 states had at least submitted implementation plans to CMS as of October 2015. The agency requested that the remaining states — including Kansas — submit plans by Dec. 31, 2015, that included “a detailed work plan and timeline for full implementation.”
A Freedom of Information Act request for Kansas’ response showed that the Kansas Department of Health and Environment agreed to a plan, effective Sept. 1, 2016, to “hire a contractor to develop an AVS (asset verification system).”
There was no timeline for Kansas in the documents CMS provided.
A state spokeswoman said last month that KDHE was still seeking a contractor to develop the asset verification system. Mike Randol, director of KDHE’s Division of Health Care Finance, said last week that he could provide no further update.
Effect on nursing homes
Without an electronic system to automatically check bank records, real estate holdings and other assets, states must collect documents from applicants to ensure they aren’t too wealthy to qualify for Medicaid.
Some states are still able to get applications processed within the 45-day CMS limit. But for more than a year, Kansas has had a backlog of thousands of applications delayed months past that deadline. Nursing homes have taken a financial hit as they wait for applications to clear because their residents often rely on long-term care Medicaid coverage that requires extensive documentation.
Jennifer Sourk, an attorney for a nursing home chain named Midwest Health that operates 38 facilities in Kansas, testified last week at a hearing of the Robert G. (Bob) Bethell Joint Committee on Home and Community Based Services and KanCare Oversight.
She and other representatives of nursing home groups told legislators that they were struggling to help residents get Medicaid approval amid requests for more documentation — some of which she said was unnecessary or duplicative.
She and others chalked up the increased paperwork requests to an administrative switch that put inexperienced workers at KDHE and a contractor, Maximus, in charge of the complex long-term care applications that previously were the responsibility of the Kansas Department for Children and Families.
State officials have agreed that change contributed to the application backlog.
Sourk said she was unaware of the federal law mandating an electronic system that could automatically pull bank records. But she said it would be a big help, if implemented.
“It would be tremendous,” she said.
Sourk said her company has two staffers working full-time to assist families with their applications and they are still swamped. Smaller providers are likely struggling more, she said.
“My company has me and we have an accounts receivable department,” Sourk said. “But the majority of homes are small, independently owned.”
The lawsuit
The Good Samaritan Society, a South Dakota-based nonprofit that operates 32 nursing homes in Kansas, filed its federal lawsuit in September on behalf of 21 plaintiffs who live in its facilities. The suit alleges that the 21 have applications pending more than 45 days and the nursing homes have provided more than $800,000 in uncompensated care while they wait for Medicaid applications to clear.
“A lot of these facilities operate on really thin margins,” Bogar said. “What are they supposed to do?”
Bogar said his firm has filed a similar suit in Illinois, which also has an application backlog and has yet to implement an asset verification system.
At last week’s KanCare oversight committee meeting, Kansas officials said they had nearly resolved the backlog and are trying to work with nursing homes to get their residents’ Medicaid applications processed and maintain cash flow while they wait.
The state has implemented an advance payment process for Medicaid-pending residents and shifted dozens of DCF workers back into processing the long-term care applications.
Nursing home associations and attorneys who represent aging Kansans have reported success in getting long-delayed applications processed after filing for administrative hearings or bringing them to the attention of lawmakers.
Bogar said the lawsuit has garnered similar results for the Good Samaritan homes.
He said applications for 14 of the 21 plaintiffs were processed in the six weeks since the suit was filed — applications that had been pending between eight and 10 months.
But he said the firm is pressing forward with the suit because pushing applications to the top of the stack based on whose advocates are making the most noise is not a sustainable fix.
“What’s going to happen six months from now?” Bogar asked. “The exact same thing will happen six months from now. They’ll forget about us, they’ll get behind and we’ll be right back in the same boat.
“So we’re thrusting this onto the federal court and saying we want automatic (electronic) approval. That’s the only way the state’s going to learn that this is a serious situation.”
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